When Securities and Exchange Commission Chairman Jay Clayton handed a policy win to corporate executives this month, he pointed to a surprising source of support: a mailbag full of encouragement from ordinary Americans.
To hear Mr. Clayton tell it, these folks are really focused on the intricacies of the corporate shareholder-voting process. "Some of the letters that struck me the most," he said at a commission meeting in Washington, "came from long-term Main Street investors, including an Army veteran and a Marine veteran, a police officer, a retired teacher, a public servant, a single mom, a couple of retirees who saved for retirement." Each bolstered Mr. Clayton's case for limiting the power of dissenting shareholders.
But a close look at the seven letters Mr. Clayton highlighted, and about two dozen others submitted to the SEC by supposedly regular people, shows they are the product of a misleading — and laughably clumsy — public relations campaign by corporate interests.
That retired teacher? Pauline Yee said she never wrote a letter, although the signature was hers. Those military vets? It turns out they're the brother and cousin of the chairman of 60 Plus Association, a Virginia-based advocacy group paid by corporate supporters of the SEC initiative. That single mom? Data embedded in the electronically submitted letter says someone at 60 Plus wrote it. That retired couple? Their son-in-law runs 60 Plus.
"I never wrote a letter," said one of the retirees, Vytautas Alksninis, reached by phone at his home in Connecticut. "What's this all about?"
Then there's the public servant Mr. Clayton mentioned. Marie Reed's letter has sharp words for proxy advisers, firms that counsel fund companies on how to vote at shareholder meetings. But when reached by phone in California, the retired state worker said she wasn't familiar with the term. She said the letter originated with a public-affairs firm that contacted her out of the blue.
"They wrote it, and I allowed them to use my name after I read it," she said. "I didn't go digging into all of this."
The SEC declined to comment on any irregularities with the letters. The proposal was "informed by a variety of inputs," it said in a statement to Bloomberg News. "The various letters we received on the proxy process highlighted the importance of these issues. We welcome all interested parties, particularly our Main Street investors, to comment on our proposals."